Strike formalises Macquarie deal, breaks ground at South Erregulla
31 . 03 . 2025
Article by Elisha Newell, courtesy of Business News
31.03.2025
The Macquarie package exposes Strike to another $217 million in funding as it breaks ground on the South Erregulla gas station.
Strike Energy has dotted the I’s and crossed the T’s on a $217 million financing package with Macquarie Bank as it breaks ground at the South Erregulla gas station.
The multimillion-dollar war chest, announced late last year, will support the ASX-listed energy stock as it advances earthworks at the early-stage power plant.
The vast majority of the Macquarie financing package — $162 million — represents committed funding from the Macquarie team. Strike can top up its bank balance with the remaining $55 million as and when required.
John Poynton-chaired Strike got the green light for its $137 million South Erregulla station in November 2024, paving the way for a new development in the Perth Basin.
The company expects it to pay back over four years from production, with an internal rate of return of 27 per cent and an operating life of 21 years.
Construction is slated for April 2025, kicking off an 18-month process to bring the power plant online in late 2026.
Strike’s South Erregulla development comprises a gas-fired peaking power plant with a maximum export capacity of 90 megawatts.
It will include 20 4.5-megawatt generators, 20 silencer stacks, elevated horizontal radiators, a switchyard, and a 20-kilolitre wastewater treatment system.
The power plant was forced to take a different shape last year after the company downgraded its gas reserves.
Strike’s chief development and marketing officer, Crispin Collier, teamed up with the Australian Energy Market Operator and other regulators to come up with a plan after the resource came in far smaller than expected.
“The power station takes a small amount of gas, four terajoules a day, and we’ll convert it into power when the wind isn’t blowing and the sun isn’t shining,” he said in November.
“When it’s not windy or sunny and we still want electricity, that’s when the plant will operate.”
“Since 2022 Hancock has invested in excess of $2 Billion into the Australian gas industry.
Given that most of our existing Eastern States gas production through our investment in Senex has been sold under long term contracts we do not believe we would be affected by the Coalition policy, at least currently. Like others in the industry we are keen to see the details of the policy to understand how it will encourage continued investment.
Hancock believes that an abundant supply of gas is vital for reliable electricity , including for homes, hospitals, security, airports , businesses and more across Australia, and welcomes measures to streamline government approvals and provide policy certainty, to ensure Australia as a country is not overlooked for the necessary investment.”
Kind regards,
Stuart Johnston
CEO of Hancock Energy
